Intangible Assets

Intangible assets are non-physical assets that hold value for your business, such as intellectual property rights, patents, licenses, trademarks, or goodwill. Proper management of these assets is essential for accurate financial reporting and compliance. Manager.io provides a dedicated Intangible Assets tab to help you efficiently track and manage these assets throughout their lifecycle.

Accessing the Intangible Assets Tab

To begin managing your intangible assets, navigate to the Intangible Assets tab in Manager.io's left navigation pane.

If you do not see the Intangible Assets tab, you may need to enable it by clicking on the Customize link at the bottom of the navigation pane and selecting Intangible Assets.

Creating a New Intangible Asset

To add a new intangible asset to your records:

1. Click the New Intangible Asset button in the Intangible Assets tab.

   Intangible AssetsNew Intangible Asset

2. Fill in the details of the intangible asset:

   • Code: (Optional) Enter a unique code to identify the asset.
   • Name: Provide the name of the intangible asset.
   • Description: (Optional) Add a description or any relevant details.
   • Amortization Rate: Specify the rate at which the asset will be amortized.
   • Control Account: Select the control account associated with the asset. If you haven't set up custom control accounts, it will default to Intangible assets.

3. Click Create to save the intangible asset.

Note: When you first create an intangible asset, its acquisition cost will be zero because no transactions have been linked to it yet.

Recording the Acquisition Cost

To set the acquisition cost of the intangible asset, you need to record a transaction representing its purchase. This can be done through a payment or a purchase invoice, depending on how the asset was acquired.

Recording a Purchase with Cash

If you purchased the intangible asset using cash:

1. Go to the Payments tab.
2. Click on the New Payment button.
3. Enter the payment details:
   • Pay From: Select the bank or cash account used.
   • Date: Enter the date of the transaction.
   • Description: (Optional) Describe the payment.
4. In the line item:
   • Account: Select Intangible assets at cost.
   • Item/Name: Choose the specific intangible asset.
   • Amount: Enter the purchase amount.
5. Click Create to record the payment.

Recording a Purchase on Credit

If you purchased the intangible asset on credit:

1. Navigate to the Purchase Invoices tab.
2. Click on the New Purchase Invoice button.
3. Enter the invoice details:
   • Supplier: Choose or create a supplier.
   • Invoice Date: Enter the date of the invoice.
   • Due Date: Specify the payment due date.
   • Invoice Number: (Optional) Enter the supplier's invoice number.
4. In the line item:
   • Account: Select Intangible assets at cost.
   • Item/Name: Choose the specific intangible asset.
   • Amount: Enter the purchase amount.
5. Click Create to save the purchase invoice.

Understanding the Intangible Assets Tab Columns

The Intangible Assets tab displays a list of your intangible assets with key information in several columns:

Code

Displays the unique code assigned to each intangible asset for easy identification.

Name

Shows the name of the intangible asset.

Description

Provides additional details or notes about the asset.

Amortization Rate

Indicates the rate at which the intangible asset is being amortized over its useful life.

Control Account

Shows the control account associated with the intangible asset. By default, this is Intangible assets, unless custom control accounts are set up.

Acquisition Cost

Represents the total cost of acquiring the intangible asset. This is calculated as the sum of all transactions allocated to the asset (e.g., purchases recorded through payments or purchase invoices).

Amortization

Displays the accumulated amortization amount for the intangible asset. This represents the total of all amortization entries recorded against the asset.

Book Value

Calculated by subtracting the accumulated amortization from the acquisition cost:

Book Value = Acquisition Cost - Amortization

This value reflects the current carrying amount of the intangible asset on your balance sheet.

Status

Indicates the current status of the intangible asset:

• Active: The asset is in use and continues to be amortized.
• Disposed: The asset has been disposed of or is no longer in use.

Recording Amortization of Intangible Assets

Amortization is the systematic allocation of the cost of an intangible asset over its useful life. To record amortization:

1. Navigate to the Journal Entries tab.
2. Click on the New Journal Entry button.
3. Enter the journal entry details:
   • Date: Specify the date of the amortization.
   • Description: (Optional) Describe the entry.
4. In the line items:
   • Debit:
     • Account: Select your Amortization Expense account.
     • Amount: Enter the amortization amount.
   • Credit:
     • Account: Select Accumulated amortization - intangible assets.
     • Item/Name: Choose the specific intangible asset.
     • Amount: Enter the same amortization amount.
5. Click Create to save the journal entry.

Note: Regularly recording amortization ensures your financial statements accurately reflect the diminishing value of intangible assets over time.

Disposing of an Intangible Asset

When an intangible asset is no longer in use or has been sold, you need to update its status to Disposed:

1. In the Intangible Assets tab, click on the asset you wish to dispose of.
2. Click on the Edit button.
3. Change the Status from Active to Disposed.
4. Enter the Disposal Date.
5. If you received proceeds from the disposal, record the transaction in either the Receipts or Sales Invoices tab, allocating it appropriately.
6. Click Update to save the changes.

Disposing of the asset ensures it no longer appears as an active asset and stops any further amortization entries.

Monitoring Intangible Assets

Regularly review the Intangible Assets tab to monitor the status and book value of your assets. This helps in:

• Assessing the need for impairment adjustments.
• Planning for asset replacement or renewal.
• Ensuring accurate reporting for financial statements and audits.

By keeping detailed records and updating transactions related to your intangible assets, Manager.io provides a clear and accurate overview of these valuable business resources.

Conclusion

Effectively managing intangible assets is crucial for maintaining the integrity of your financial records. Manager.io's Intangible Assets tab offers a comprehensive solution to track acquisition costs, amortization, and disposals, ensuring your financial statements reflect the true value of your non-physical assets. Regular updates and accurate transaction recording will help you stay compliant and make informed business decisions.